Nvidia (NVDA) Stock: Why Investors Are Dumping Shares Despite Record $57 Billion Revenue

Nvidia just posted a staggering $57 billion in revenue. So why are investors hitting the sell button?

The AI Halo Is Fading

For years, NVDA rode the AI hype wave to stratospheric valuations. Every data center buildout, every new large language model, was a reason to bid the stock higher. The $57 billion figure confirms the demand was real—monumentally real. But on Wall Street, past performance is just a receipt, not a ticket to future gains. The market is forward-looking, and what it sees now is a mountain of expectations that even record results might not satisfy.

Peak Growth Fears Take Hold

The core issue isn't the number itself; it's the trajectory. A record quarter can also signal a peak. Analysts are scrambling their models, questioning if the breakneck pace of AI infrastructure spending is sustainable. When you're valued as a perpetual growth machine, even a hint of a slowdown in the growth *rate* sends shockwaves through the portfolio. It's the classic finance paradox: beat expectations, but not by *enough*, and you get punished.

Valuation Versus Reality Check

Let's talk multiples. Nvidia's valuation priced in perfection for years to come. The $57 billion revenue, while massive, acts as a concrete anchor for a reality check. It provides a hard number against which to measure the still-sky-high stock price. Investors are doing the math and deciding the risk/reward has shifted. The easy money has been made, and the trade is now crowded. It's a brutal calculus—one part profit-taking, two parts fear of being the last one out.

The Cynical Take

Here's the finance jab: Wall Street loves a story until it needs a new one. Nvidia's story was airtight—the undisputed picks-and-shovels play for the AI gold rush. But narratives have expiration dates. Now, the conversation pivots to competition, cyclicality, and 'digestion phases.' It's a reminder that in the market, today's fundamental truth is often tomorrow's inconvenient backdrop for a new, shinier narrative. The selling isn't about the $57 billion; it's about the fear that the next chapter might be less thrilling to read.

So the sell-off unfolds. Not because Nvidia failed, but because it succeeded on a scale that forces a brutal, forward-looking reassessment. The bar was set in the clouds, and even a record leap might not have cleared it.

TLDR

• Nvidia stock has dropped 17% from recent highs despite Q3 revenues hitting $57 billion, up 62% year-over-year
• Analysts are cutting price targets and investors are taking profits due to stretched valuations and portfolio rebalancing
• Management expects Q4 revenues of $65 billion, representing approximately 65% year-over-year growth
• Some analysts predict Nvidia could reach a $15 trillion market cap by 2030, more than tripling from current $4.4 trillion
• Competition from AMD and other chipmakers is intensifying, with AMD’s MI450 claiming to surpass Nvidia’s upcoming processors

Nvidia shares have tumbled 17% from recent peaks despite delivering blockbuster financial results that beat analyst expectations. The company reported Q3 2026 revenues of $57 billion, representing a 62% increase from the previous year.

NVIDIA Corporation, NVDA

The stock’s volatility has caught many investors off guard given the company’s stellar performance. Nvidia’s current market cap stands at approximately $4.4 trillion after pulling back from the $5 trillion milestone.

Some analysts are trimming their price targets on the stock, citing concerns about valuation levels. Institutional and retail investors have begun taking profits after the strong run-up, viewing current prices as an opportunity to lock in gains.

Management issued guidance for Q4 revenues of $65 billion, which WOULD represent around 65% growth year-over-year. Despite these projections, some market participants remain cautious about near-term demand patterns.

Valuation Concerns Drive Selling

The company’s price-to-earnings ratio currently sits at 45, which some analysts consider elevated despite the rapid growth rate. For comparison, the S&P 500 trades at an average P/E ratio of 31.

Portfolio rebalancing has contributed to the selling pressure as Nvidia’s weight in many funds grew substantially. Tactical selling into strength has become common among professional money managers.

AI-focused funds have experienced notable flows both in and out as traders reassess positions. Macro factors including interest rate expectations are also influencing trading decisions in big-cap AI stocks.

Long-Term Growth Projections

Some market watchers believe Nvidia could reach a $15 trillion market cap by 2030. This projection is based on the AI chip market growing at a compound annual growth rate of 29% through the end of the decade.

At current growth rates, the company could theoretically hit that milestone much sooner. However, revenue growth rates have already begun slowing from 94% a year ago to the current 62%.

Nvidia controls an estimated 80% of the AI chip market according to Susquehanna estimates. But competition is heating up as rivals ramp up investments to capture market share.

AMD has emerged as the primary competitor, with companies like Microsoft, Meta Platforms, and Oracle already using AMD accelerators. AMD claims its MI450 processor will outperform Nvidia’s upcoming Vera Rubin chips.

The company maintains its position as the dominant AI accelerator provider for now. Competition could impact both growth rates and profit margins going forward.

Investors will likely get clarity on the competitive landscape over the next year. The performance of AMD’s MI450 against Nvidia’s new chips will be closely watched by Wall Street.

Management expects continued strong demand for AI chips across hyperscaler customers. The company’s data center business remains the primary growth driver for revenues.